Mapping Your Competitive Position

The development of a strategy that influences how a market segment perceives a brand, good, or service in comparison to the competition is known as positioning. Positioning your product in the mind of the customer is all about creating an association with your product.

You should also consider what your target market thinks about your competition and how you can differentiate your product. Positioning doesn’t just mean what your target market thinks of your product, but what they think of your competition and how you can make your product stand out. The focus is not on how customers think about your product itself, but rather how it stacks up against competitors’ products. Your product may be less expensive, perform better, or fit better with the customer’s lifestyle. Positioning often relates to a brand’s strategic objectives.

Perceptual Mapping & Positioning Dimensions

Perceptual maps are used to visually display how customers perceive a company’s products in relation to the competition. This can help businesses understand where their products are positioned in the market and identify any gaps that need to be addressed. Perceptual mapping is a technique that marketers use to try to understand how customers or potential customers see the products or services that are available to them. A product’s position is usually displayed in relation to its competition. Some perceptual maps use different size circles to indicate the sales volume or market share of the various competing products.

Perceptual maps typically have two dimensions, but can have more. The image below shows how consumers perceive various automobiles in terms of sportiness/conservative and classy/affordable. The study’s participants thought that Porsche cars were the most sporty and classy. They Plymouth cars to be the most practical and conservative. Cars positioned close to each other were seen as more similar than those positioned further apart. For example, consumers saw Buick, Chrysler, and Oldsmobile as similar brands: they are close competitors and form a competitive grouping. A company looking to introduce a new model may try to find an area on the map where there are no competitors, or find a way to make their product more differentiated and noticeable.

The types of cars people like can be determined by how sporty or conservative they are, and how practical and affordable or classy and distinct they are. Based on the Mapping out where consumers perceive your product in relation to others will help you to determine the best way to position your product. This helps to determine if positioning should be based on function, symbolism, or experience. A strong product positioning will allow a company to reach different types of customers for different reasons. For example, two people who are interested in buying a new car might want different things; one might want a car that is powerful and stylish while the other buyer might be looking for a car that is reliable and safe. However, in spite of these different desires, they might still end up buying the same exact car. One purchase solved a problem by providing a functional solution, while the other purchase is an example of choosing a product for its symbolic or experiential value.

Drawing Positioning Maps

A price-benefit positioning map simply displays the correlation between the main benefit a product offers to customers and the prices of all products in a market. Creating such a map involves three steps.

Define the market.

In order to create a helpful map, you need to determine the limits of the market you’re investigating. First, identify the consumer needs you wish to understand. You should look for a lot of different products and services that can meet your needs, so you’re not surprised by new companies, new technologies, or unusual offerings that can take care of those needs. After deciding what you would like to study, choose the country or region you would like to do so in. If customers, competitors, or how products are used differs widely across borders, it is best to limit the geographic scope of the analysis. After considering all of the aforementioned factors, determine if you want to track the general market for a product, or just a specific market segment. Also, decide if you want to focus on the retail market or the wholesale market, and finally, decide if you want to track products or brands. You can create different maps by changing the way you analyze the data.

Choose the price and determine the primary benefit.

After you have determined who your target market is, you need to then narrow down your analysis of prices to that group. You have made an indirect decision about whether to study retail or wholesale prices depending on which market you choose to focus on, but you must also take into account other pricing elements. You have to decide whether to compare initial prices, prices that take life cycle costs into account, prices with or without transaction costs, and prices of unbundled or bundled offers. The choices customers make in the market depend on the standards they use to make purchasing decisions. It is important to use the same price definition while collecting data. This will ensure that the data is accurate and consistent.

The primary benefit is the main benefit that explains the most variance in prices. A product with many benefits is more likely to be successful than a product with fewer benefits. Some benefits that a product may offer are basic functions, additional features, durability, serviceability, aesthetics, ease of use, and more. In addition to this, companies will typically focus on a different benefit to help differentiate their product from that of their competitors. The success of a company’s strategies depends on how much value customers, not the company, place on its features. You need to make a list of all the benefits offered by the different products or brands in the market to see which one is the best value. To do this, you need to find out how customers perceive those benefits.

You should use unbiased data when estimating the benefits’ value, so that you don’t rely on gut instinct or top managers’ opinions.

Once you have collected data on the benefits and prices of products, use regression analysis to determine which benefit has the most impact on the prices of products. Asking people how much they are willing to pay for each feature is not as reliable as using regression analysis because consumers often can’t explain how they make their choices and they often don’t do what they say.

Plot positions and draw the expected-price line.

Once you have determined the key benefit that your product offers, you can create a positioning map that shows how your product stacks up against the competition in terms of both price and the level of primary benefit it provides. Although they may not be completely accurate, these types of maps can give you a general idea of where your competitors stand in relation to each other.

The final step is to draw a line that represents the expected price. This line should go through the points on the map that have been previously determined. The line reflects how much customers are willing to spend on average to achieve different levels of the primary benefit. The line’s slope also indicates how much more a customer would be willing to pay for an increase in the main advantage. To find the line that best fits the data, take the slope associated with the portion of the price-benefit equation that links the primary benefit to prices. You can either look at the map and draw a line through the center of the points, or half the points should be above the line and half should be below it. A line that rises to the right is the best fit for data in almost every industry, according to research. Although curved lines and negatively sloped lines are possible in theory, they only describe brief and temporary events. As benefits increase, people are willing to pay more for them, creating a straight line with a positive slope.

Positioning Statements

The final step in finding the best positioning strategy for marketers is the positioning statement. The positioning statement is a reflection of all the research you have done to that point about how your product, service, or brand can most effectively reach your target demographic. It provides a clear explanation of how you plan to provide value to your target customers. In effect, it’s a short, persuasive argument.

A positioning statement helps identify your target market and what you want them to think about your brand. This statement is typically one sentence long and is used to help guide your brand’s marketing efforts. This statement should include 1) the target segment, 2) the brand name, 3) the product/service category or frame of reference in which you are establishing this market position, 4) the key points of differentiation, and 5) the reasons customers should believe the positioning claims.

Crafting the Positioning Statement
The brand consultancy EquiBrand (n.d.) recommends the following straightforward formula for writing positioning statements:

Product X is the superior option for [target audience] because it [points of differentiation/benefits delivered]. There are several reasons to believe this is the case, including [reasons to believe].

The parts of the formula supplied by you (the marketer) are as follows:

  • The “target audience” is a brief description of the segment you’re targeting with this positioning strategy. For example: young urban malesmanaging partners in law firms, or small business owners in the Pacific Northwest.
  • “Product X” is your product, service, or brand name.
  • The “category or frame of reference” is the category of products or services you’re competing in. For instance: spectator sporting eventsvirtual assistant services, or employer 401K benefit plans.
  • The “points of differentiation/benefits delivered” explains both what problem you solve and how you solve it in a different and better way than competitors. It highlights the competitive advantage(s) underpinning your positioning strategy. Be sure to explain not just what is different about you, but why customers care about that difference.
  • The “reasons to believe” are any proof points or evidence that show your customers how you live up to your claims about how you are different and better.

Evaluating Positioning Statements

What makes a positioning statement effective? The elements in the formula are needed in order to create a well-developed marketing mix. -What other criteria should you look for? For example, the following:

  • Is it tailored to the target market? Too often, positioning statements either leave out the target segment, or else the entire approach isn’t really suited to that unique group. If a positioning statement would work just as well if you plugged in a completely different target segment, then you probably haven’t thought deeply enough about your target’s unique needs and what will make them want your product. Or, you’ve defined your target segment too narrowly, in which case you should revisit whom you’re trying to reach.
  • Is it simple, focused, and memorable? A positioning statement that is overly complex will be hard to execute against because it isn’t focused enough to deliver a clear message to the customer. Make sure it is very clear what problem(s) you solve. Use easy-to-understand words instead of jargon that muddles the meaning. If your statement is running long, consider trimming a few differentiators or benefits. It’s actually very good to prune down to the essentials so your meaning is crystal clear. Make every word count!
  • Does it provide an unmistakable picture of your product, service, or brand? Your positioning statement should work beautifully for you, but not very well for your competitors. If you can substitute any competitor’s name for your own in the positioning statement—and it still sounds credible—then you need some additional work on your differentiators and competitive advantages. If you are going to own your market niche, it must be a place that no one else can easily occupy.
  • Can you deliver on the promise you make? The positioning statement promises some benefits or outcomes to your customers. You must be able to consistently live up to this promise—otherwise you’ll lose credibility, and your offering will stand for something that’s untrustworthy. If you can’t live up to your promise, you need to take another, more realistic look at the offering’s benefits and the customers’ reasons to believe.
  • Does it provide helpful direction for designing the marketing mix and other decisions? From the positioning statement, you should have a sense of what types of activities and messages are consistent with that positioning and support the brand you are working to build.

Positioning should be designed to last. You will need to revisit your positioning strategy and consider whether to make adjustments for most offerings.


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